South Africa's state-owned asset manager the Public Investment Corporation (PIC) is looking towards South Africa's townships and rural areas to grow its property portfolio.

PIC chief executive Brian Molefe gave details of how a further R1 billion would over the next three years be invested in township developments and improve its property portfolio.

In his media briefing in parliament yesterday, Molefe noted that the PIC had bought into the Futuregrowth community fund and merged it with its own fund to promote "historically disadvantaged areas".

The PIC, which oversees R60billion worth of the state's pension fund, already had properties around the country worth about R1billion. These included shopping centres in Mitchell's Plain in Cape Town, Mdantsane in East London, Mafikeng in the North West, Tembisa in Johannesburg, Khutsong near Carltonville and Empangeni near Richard's Bay.

The upgrading of three shopping centres - at Garankuwa, Mabopane and Hammanskraal - had cost in the region of R400 million, said Molefe, adding that, "in the next three years we hope to spend another R1 billion on similar developments all over the country. This is one of the most exciting developments in the property sector."

The community property fund was a better performing portfolio than the PIC's holdings in Sandton City and Sandton Square - the upmarket shopping precinct of Johannesburg, said Molefe.

PIC property head Wayne van der Vent, a former Futuregrowth Asset Management director, said townships promised better return on investments than other areas, which were saturated.

"We can't wish the townships away. They also need to have the same offerings you find in suburbs. This is also part of the government urban renewal programme."

Property accounts for only 1% of assets under PIC management. Van der Vent said that he wanted to grow that to 5% through direct investments over the next three years and to 10% thereafter.

The township and rural locations of some of its retail centres was a crucial consideration in the "government accommodation" segment of the PIC's property portfolio.

Van der Vent said the PIC wanted to play a leading role in providing office space for government that was closer to the people it was trying to serve.

Daily Dispatch
 
Publisher: I-Net Bridge
Source: I-Net Bridge